Ohio Valley lands ethane cracker

February 14, 2013

MOUNDSVILLE - An ethane cracker should bring about $500 million worth of investment and as many as 125 permanent, full-time jobs to West Virginia's Northern Panhandle, local officials said Wednesday.

Although she declined to confirm the precise location of the planned facility, Marshall County Administrator Betsy Frohnapfel said Houston-based Appalachian Resins has been looking to build in her county. The site likely would be along the Ohio River, as the petrochemical plant would have easy access to water, river transportation, CSX railroad lines and W.Va. 2 - as well as the steady supply of ethane coming from local Marcellus and Utica shale natural gas operations.

"It is not a done deal, but it is moving very quickly," said Don Rigby, executive director of the Wheeling-based Regional Economic Development Partnership. "We have been working with Appalachian Resins for a while now. This is a very nice project."

According to published reports, Appalachian Resins Chief Executive Officer James Cutler believes construction will begin by the end of this year, with the plant going online before the end of 2015.

"In addition to good economics, we believe that the Appalachian Resins business model - regional-sized petrochemical production facilities - supports a resilient supply chain," Cutler added in those reports.

Cutler could not be reached Wednesday for additional comment.

In addition to the permanent jobs, Rigby said the cracker project would bring an undetermined number of temporary construction jobs to the area and related economic activity.

Marshall County's collective property value already has increased by $577.2 million from the 2012 to 2013 tax years, largely because of oil and gas drilling and processing plants built by Dominion Resources, Williams Partners and MarkWest Energy.

"The project is not finalized, but it is very exciting for Marshall County," Frohnapfel said.

Rigby has worked to bring an ethane cracker to West Virginia for roughly three years, dealing with companies such as Royal Dutch Shell and Aither Chemical. Ultimately, Shell announced plans last year to construct its cracker at a site in Monaca, Pa., though Shell has yet to acquire the land for this facility from Horsehead Corp.

Although not confirming the exact location, Rigby said Appalachian Resins considered a variety of sites before looking at Marshall County.

According to the firm's website, Appalachian Resins is a "start-up company" that plans a facility that will produce about 508 million pounds of ethylene and 500 million pounds of polyethylene each year. Unlike the planned Shell facility, it states, this cracker would not be "world scale," meaning it would not need as much space to operate.

The liquids-rich Marcellus and Utica shale natural gas in northern West Virginia and eastern Ohio makes the Upper Ohio Valley a prime location for an ethane cracker, according to industry officials. In addition to ethane, other natural gas liquids produced from the wet Marcellus and Utica shale gas include propane, butane and pentane. All of these elements must be stripped away from the dry methane natural gas at processing plants - such as the soon-to-open Dominion Resources Natrium facility - so the methane can be sold by utility companies.

Because there is no ethane cracker in the Utica and Marcellus regions, some companies are now shipping the product for cracking at facilities in Canada or along the Gulf Coast. Others are simply burning it off via flaring, according to Corky DeMarco, executive director of the West Virginia Oil and Natural Gas Association.

"We would like to be able to use this resource for something more than making smoke in the air. We are flaring off enough ethane already that we could probably supply an ethane cracker," said DeMarco. "I do not think there is any lack of supply."